IASC Board Says No to Adopting FASB Financial Instruments
Rules; Core Standards Will Be Delayed
The International Accounting Standards Committee board of directors rejected a proposal by the IASC executive committee and its secretary-general, Sir Bryan Carsberg, to adopt the Financial Accounting Standards Board's rules on financial instruments reporting, including the FASB standard on derivatives disclosure.
|World Meeting of Accountants Is a Success|
The 1997 World Congress of Accountants, held in Paris in October, set new records for attendance and had representation from more countries than ever before. Over 6,000 accountants and guests from more than 100 countries attended the conference, including, for the first time, sizable delegations from Russia, China and Vietnam.
The theme for the World Congress, which is held every five years, was "how accountants best serve the public interest." Accountants worldwide were invited to discuss related trends and developments and how they affected various segments of the accounting profession. They participated in large plenary sessions and then broke into smaller workshops for discussion and analysis.
French President Jacques Chirac, who spoke on the profession's significant role in the development of the world's economy, urged attendees to continue to focus on international harmonization. It was the first time that any country's president had addressed the World Congress.
In another session, World Bank President James Wolfensohn said the profession needed to be more active in combatting fraud. He asked attendees to encourage more disclosure in both the public and private sectors—particularly in developing nations—and to promote global accounting and auditing standards.
The formation of a new International Federation of Women Accountants was announced at the conference. Also, the International Federation of Accountants, which had sponsored the event, elected Frank Harding of the United Kingdom as its president for a two-and-a-half-year term.
More information on the World Congress will appear in an upcoming issue of the Journal of Accountancy .
It was originally thought that, by adopting the FASB standards, the IASC would be able to meet its goal of completing a core set of standards by March 1998. The IASC had reached an agreement with the International Organization of Securities Commissions (IOSCO) in 1995 to complete core standards IOSCO could endorse for crossborder offerings and listings by March. The IASC now is hoping to have final rules on financial instruments completed in November.
The IASC board decided that adopting the FASB standards, even on an interim basis, would undermine the IASC's established due-process procedures. The board also said integrating the style of FASB standards with that of international accounting standards would be difficult. Instead, the board will prepare a new exposure draft based on the main elements of the FASB standard that could be exposed for comment by April.
According to an IASC release, the board believes the best long-term approach to improving worldwide financial instruments reporting is to join with other national standard setters to develop an "integrated and harmonized international accounting standard for financial instruments." The board agreed to expeditious review of this issue to complete the project in 1998.
New Report on Measuring Long-Lived Assets
The Financial Accounting Standards Board and members of a group of international standard setters, G4+1, published a special report to promote harmonization in the application of recoverable amount tests or impairment tests. G4+1 members consist of the boards and senior staff of the standard-setting bodies of Australia, Canada, New Zealand, the United Kingdom and the United States.
In March 1995, the FASB issued Statement no. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of , and the International Accounting Standards Committee and the United Kindgom have published their own proposed standards. There are significant differences among the final and proposed standards for recoverable amount tests. Entities use those tests to determine whether the carrying amounts of assets are recoverable from the net cash inflows they are expected to generate.
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The differences in standards have been a source of debate among the G4+1 standard setters, and the group prepared the special report, International Review of Accounting Standards Specifying a Recoverable Amount Test for Long-Lived Assets , to promote the development of new and improved standards that are similar among the participating countries.
A copy of the report is available for $11.50 by calling the FASB order department at 203-847-0700, ext. 555.